IFC provides financing and advice to help countries mitigate and adapt to a global threat.
The science is unequivocal: without concerted action to reduce greenhouse emissions, the world could grow warmer by 4 degrees Celsius within this century. The consequences could be devastating—unprecedented heat waves, drought, and floods that put prosperity out of reach for millions of people in developing countries and roll back decades of progress in development.
Combating the dangers of climate change will be costly: up to $100 billion a year for developing countries. But it can be done if the resources and creativity of the private sector are tapped.
IFC is finding ways to unlock private capital for climate-smart projects. We’re helping finance the development of innovative technologies and encouraging a shift toward energy efficiency and renewable energy. We also provide financing and advice to help countries mitigate and adapt to climate change.
Since 2005, IFC has invested $10.5 billion in climate-related investments, including $2.5 billion just in FY13. We issued the world’s largest “green” bond this year, raising $1 billion specifically for climate-related investments—an achievement that underscored the private sector’s growing demand for triple-A-rated green bonds. We also launched the IFC Catalyst Fund—an innovative fund of funds, managed by IFC Asset Management Company, focused on climate-related investments.
In South Africa, we provided an innovative financing package—which included $225 million in funds mobilized through loan syndications and $41.5 million in donor funds—to support the construction of the region’s first concentrated-solar-power plants. The Khi Solar One and KaXu Solar One projects, which use mirrors to reflect and concentrate rays of sunlight to heat steam that can power turbines, will help diversify South Africa’s energy generation away from coal-fired power.
We are working to address the environmental challenge posed by expanding cities. Buildings account for 15 percent of global greenhouse emissions—a number that is expected to climb in coming decades as more people in developing countries migrate to cities in search of work.
We see a significant opportunity to make a difference by helping construction companies adopt more affordable, energy-efficient designs. Through our Excellence in Design for Greater Efficiencies—or EDGE—tool, we have established an international green-building standard that is helping our clients save money while reducing emissions.
In FY13, we made our first investments through financial intermediaries in new green buildings—including mortgages for energy-efficient homes in India. Along with the World Bank, we have also advised Russian policymakers on groundbreaking legislation that will enable millions of homeowners to obtain new financing for energy-efficiency improvements.